Hammond told Sky News on Thursday: "The economy has taken a
shock. We will take whatever measures are necessary to restore
confidence, stabilise the economy as we move forward with the
negotiating process."

Hammond told Sky he does not expect to make an emergency budget
and said: "Britain is open for business, we are not turning our
back on the world and we are determined to maintain our
outward-looking stance.

"We will do whatever we need to do to restore confidence and to
keep Britain as an attractive destination for businesses to
invest and create jobs."

As well as pledging to support business, Hammond also signalled
that George Osborne's era of austerity could be coming to an end.

He told Sky News: "George Osborne did a fantastic job of taking
this economy from the disastrous position we were in 2010. We are
immeasurably stronger today than we were 6 years ago. But now we
are moving into a different phase for the British economy with
new challenges as we exit the European Union and new
opportunities as well."

As Chancellor George Osborne made reducing the UK's budget
deficit his top priority. In practice, this meant deep spending
cuts to government departments and welfare spending, leading the
policy to be dubbed "austerity."

When asked if he believed in deficit reduction on the BBC's Today
Programme on Thursday, Hammond replied: "Our economy will
change as we go forward and it will require different parameters
to measure its success. Of course we've got to reduce the deficit
further, but looking at how and when and how we measure our
progress in doing that is something that we now need to consider
in the light of the new circumstances that the economy is
facing."

The decision to put deficit reduction on the back-burner is
surprising given Hammond's reputation as a fiscal hawk.
Berenberg’s Senior UK Economist, Kallum Pickering, predicts that
it will become a greater priority once the UK is out of the
Brexit woods, writing in a note on Thursday:

"Hammond has a reputation as a fiscal hawk, which potentially
conflicts with May’s pledge to ease up on the pace of austerity.
As a best guess, we will likely see a compromise between these
two positions at November’s Autumn Statement. Looser fiscal
policy in the near-term while demand is weak with the major cuts
pushed to the back of the forecast when economic growth is likely
to improve."

While deficit reduction may take a back seat at the Treasury
under Hammond, it does not necessarily mean the end of austerity
in terms of welfare spending. Hammond may simply decide to
emphasise spending on infrastructure and other large projects to
boost economic growth.

Barclays and
Credit Suisse have both this week predicted that the Brexit
vote will tip the UK into recession and Bank of England Governor
Mark Carney
made a similar prediction prior to the vote. Asked if he
expects a recession, Hammond told Sky News: "I shall today have a
series of economic meetings... That's an assessment I will want
to make for myself over the coming hours."